Nestande’s Accommodating Friends : Housing Aid Raises Conflict Issue
I didn’t ask anybody for a deal. I didn’t call anybody and say, ‘Will you ask for a deal? Will you give me cheaper rent?’ I didn’t ask for any special consideration. . . . My conscience is clear. . . . I have a clean slate.
Supervisor Bruce Nestande
Last May, when Bruce Nestande sold his home and then watched the escrow fall through on the house he wanted to buy, the supervisor had an option most people wouldn’t have. Nestande, now a Republican candidate for California secretary of state, called several developers in his 3rd Supervisorial District and asked them if they had any homes he could rent.
Alfred Baldwin, president of the Baldwin Co. in Irvine agreed to lease Nestande and his wife, Pam, a three-bedroom, $200,000 model home. At the same time, Nestande agreed to buy another home from Baldwin that was to be completed in early 1986.
The leasing deal was unusual from the start, a Baldwin executive said; ordinarily the company’s model homes are never rented.
“I wouldn’t put a sign out on a street corner and say, ‘Come rent this,’ ” Baldwin Executive Vice President Greg Smith said Friday. “You have to be very careful about what condition it’s in” because eventually all the homes, including models, will sell.
Still “we rented it to him at what we think is market rent” because “we know Bruce Nestande isn’t going to rip a house up as opposed to (what would happen) if we advertised on a street corner,” Smith said.
Nestande’s arrangement with the Baldwin Co. is over. Citing several reasons including his concern that a Baldwin plan that he will vote on this spring could pose a conflict, Nestande said he canceled the escrow on Baldwin’s new home in early January and in early March he moved out.
But that housing arrangement and two others Nestande has entered into since have raised additional questions of potential conflict of interest for the supervisor.
One involves a $1.3-million ocean-view house in the Harbor Ridge development of Newport Beach that is owned by developer David Stein, a good friend of Nestande. Nestande and his wife have been storing her furniture at the home, rent-free, since March 8.
Nestande, 48, has stayed overnight at the home for “two to three days” to help unpack the furniture, and Pam Nestande continues to spend occasional nights there, he said.
Voted for Stein Project
On March 12, just after Nestande moved the furniture into Stein’s unfurnished house, Nestande and four other supervisors voted unanimously to approve a multimillion-dollar Stein project in Monarch Beach that would include shops, office buildings and a hotel.
Nestande and Stein aide Christopher Townsend said Nestande was in no way involved in any discussions on the project before the vote. Nestande simply voted on the project and so had no conflict of interest, they said.
Lynn Montgomery, a spokesman for the Fair Political Practices Commission, said she could not comment on the specifics of this case nor on whether her agency was investigating. But she noted that a public official is disqualified from voting if he receives a contribution worth $250 or more, if the decision would have a significant financial impact on the contributor and if the contributor might receive a benefit different from the general public.
The other question involves Nestande’s current stay, so far rent-free, in the refurbished basement of attorney Gary Proctor, a friend of Nestande and his appointee to the county Airport Commission.
Both Nestande and Proctor said the supervisor will pay some rent soon. “He’s insisting on paying something. . . . He’s my friend,” Proctor said.
However, Shirley Grindle, author of the county’s strict campaign disclosure law known by the acronymn TINCUP, said she was concerned about whether Nestande was receiving in-kind contributions: not money but services that should be reported.
Referring to Nestande’s housing arrangements with Baldwin and Stein, Grindle said: “He’s obviously being given an opportunity by these various developers that isn’t available to you or I or to the public in general.”
Maury Evans, an Orange County deputy district attorney who supervises campaign disclosure law, said Friday he could not comment on the propriety of Nestande’s housing arrangements. “We have no active investigation at this time,” Evans said.
Moving Saga
Nestande said he and his wife would have liked to avoid the travels from house to house; the moves have been costly and not particularly pleasant, he said. Over the last 10 months, theirs has been a saga of “gypsies living out of boxes,” he said Friday.
And, though he has made arrangements to rent a one-bedroom apartment in Fullerton on April 1, Nestande said he and his wife will be looking again this weekend for a house to buy in the district.
Nestande said his house hunting began last April. At that time, he sold the house in Orange that he had owned in a previous marriage, and he and his wife tried to buy a new house.
But that house was appraised below the selling price, Nestande said, and “the escrow fell apart.” Meanwhile, his house in Orange sold. So for a few days, Nestande said, he and his wife stayed in Hotel Meridien in Newport Beach.
Then, Nestande said, “that’s when I made some contacts with various developers, ones I knew that had tracts in my district” and might have some housing on hand.
Lease and Purchase
Al Baldwin said he had a model home, Nestande said. Also, he and his wife were interested in buying the smallest home--a $240,000, 2,200- to 2,500-square-foot home--in Baldwin’s Rocking Horse Ridge development in Orange. Nestande said they entered into escrow on that home and at the same time leased the three-bedroom model home, unfurnished.
There was absolutely no quid pro quo, Nestande said. “I know Bruce Nestande,” he said. “I feel very professional in my work and my code of ethics. If Al Baldwin had said, ‘Do this for me because I do this for you,’ I’d throw him out of the office.”
“There was not some kind of hidden, subtle flavor,” to the arrangement, Nestande said. “I had to find a place to live.”
But then in January, Nestande said, he decided for several personal reasons to back out of the escrow on the $240,000 home. One reason was that he was now running for statewide office--originally for lieutenant governor but now for secretary of state--and he envisioned buying a home in Sacramento, Nestande said. Also, he said, he had learned that Baldwin would be seeking a general plan amendment this spring on a major housing project in the canyons east of Mission Viejo. The amendment would double the density of the project to about 3,556 condominiums and homes.
‘I Feel Good Inside’
“Once I saw the potential of perceived conflict . . . I thought, ‘There will be people asking questions.’ So I slammed the door shut and backed out of it with a clear conscience. I wanted to be sure when it came to the table, I can now vote. . . . It’s almost a dilemma but I feel good inside. I haven’t done anything wrong.”
Also, Nestande said, although he rented the house from Baldwin from July to March, that didn’t pose a conflict. “If I would have known at that point of time (when he first rented) that Al Baldwin would have a development up (before the supervisors), I wouldn’t have rented the house. Had I known, I would not have gone forward with the house. So I have a clean slate.”
The house, leased by the Baldwin Co. to the Nestandes for $1,200 a month, is now being rented for $1,800 a month by a new owner. However, Baldwin Executive Vice President Smith insisted that Nestande received a “market rent.”
Pam Nestande’s furniture, now stored in a Stein house in Newport Beach that is for sale, is a benefit both for Stein and the Nestandes, Stein aide Christopher Townsend said.
“Pam is a great decorator. It’s a benefit for Stein.”
Townsend estimated that Nestande might pay $200 to store his furniture, but Stein might pay “$1,000 bucks or more” to rent furniture. “It’s an even swap,” Townsend said.
According to David Garris, a real estate salesman for Monarch Bay Realty, the Stein house is a “dramatic French Normandy home.” It was listed several months ago at $1.5 million but is now on the market for $1.3 million, Garris said. The four-bedroom, 4 1/2-bath, three-level home is 5,300 square feet, has a spa and many patios and boasts “white-water views” of Newport Harbor, Newport Beach and Catalina Island, Garris said.
As for all these complex housing arrangements, Nestande said that he would try to be careful about one thing next time. “I want to buy a house some place that, I hope doesn’t have a general plan amendment coming up.”
Times staff writer John Needham contributed to this story.
The Orange County supervisor has lived at several addresses in the past year. A review:
May, 1985: Bruce and Pam Nestande sell home on Orange View Lane in Orange to buy new home. In June, after escrow on new home falls through, Nestandes move “for a few days” into the Hotel Meridien in Newport Beach, Nestande says.
July, 1985, to March, 1986: Nestandes lease a three-bedroom model home for $1,200 a month from the Baldwin Co. developers in Cowan Heights section of Orange. Also in July, Nestandes enter into escrow on new house in nearby tract, but escrow falls through in January. Lease on model home is up in March.
March 8 to present: Nestandes store Pam Nestande’s furniture at 3 San Sebastian, Newport Beach. Home, owned by developer and Nestande friend David Stein, is a $1.3-million, four-bedroom, 4 1/2-bath home with “white-water views” in Harbor Ridge development. Nestande stays “two to three” nights at this home outside his supervisorial district to help unpack. Pam Nestande stays overnight at Stein home from time to time, Nestande says.
Mid-March to present: Bruce Nestande stays in the refurbished basement of attorney Gary Proctor’s home in Cowan Heights. Pam Nestande spends the night there sometimes, Nestande says.
April 1: Nestande says he will begin month-to-month lease on small one-bedroom apartment in Fullerton. Pam Nestande will be moving into the apartment, Nestande says.
